Missouri Dairy Business Update

Volume 14, Number 7
July 2014

USDA Margin Protection Program

The 2014 farm bill provides a new program for dairy producers called the Margin Protection Program (MPP). The MPP program will provide a new risk management tool for dairy producers to guard against low milk prices and high feed costs.

USDA anticipates opening sign-up for the Margin Protection Program in September. There is some discussion that the open signup period will stretch further into the fall. If this is the case, producers would be well served by delaying making sign up decisions as late as possible so that next year's future milk prices may become more apparent.

The University of Missouri has developed a spreadsheet-based tool for dairy producers to help with their annual participation decision under MPP. The tool looks at expected returns from the program plus some risk mitigation opportunities provided by MPP to help producers make more informed decisions regarding this critical new safety net program.

MU economists will hold two free training sessions on August 26th to discuss the features of the new MPP program and give instruction on how to use the new MU margin tool.